Preliminary Audit Results

PROJECT TITLE

Kentucky State University – Vendor Payment Process

OBJECTIVE AND SCOPE

The audit objective was to perform an assurance – operational review of the Kentucky State University’s vendor payment process. The operating policies, procedures, and records for procurement activity were reviewed. This included how activity was processed, recorded, monitored, and reported. The primary focus was compliance with Kentucky State University’s policies and applicable statutory requirements. The objective was to obtain assurance that the risks were adequately mitigated through the internal control structure.

This was an assurance review based on best practices and existing policies and procedures for the operational and fiscal administration of procurement activity. The review included vendor payment activity during fiscal year 2015, fiscal year 2016 and the first quarter of fiscal year 2017 (July 1, 2016 through September 30, 2016). This was a scheduled audit.

P R

A summarization of preliminary findings related to the Kentucky State University Vendor Payment Audit include the following. It should be noted that the preliminary findings may be subject to change upon further review. • Timeliness. There were instances in which invoices were not paid in a timely manner, within 30 days of the receipt of the vendor’s invoice. • Payment Errors. There were some issues which resulted in Kentucky State University paying vendors erroneously. The errors included duplicate payments, overpaying for goods/services, and paying sales tax for which the University should be exempt. • Receipt of Goods. There were instances in which the Central Receiving Department confirmed receipt of goods in the Banner system, however, documentation could not be provided to verify receipt of goods by the requesting department received the goods. • General Administration. There were issues noted regarding the administration of the vendor payment process. ➢ There is a lack of updated desktop procedures to guide personnel in the performance of their job duties related to the procurement of goods and services. ➢ Accounts Payable does not maintain an updated list of personnel from each department that are authorized to request and pick up checks on behalf of the department. ➢ There is a lack of security cameras and alarm systems at the Central Receiving Department (i.e., Jordan Hall) which is responsible for the receipt and distribution of the majority of the supplies, materials and equipment delivered to Kentucky State University.

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